--- title: "Neighborhood store bidding set a record last year Analysis: Still a stable and attractive investment" type: "News" locale: "en" url: "https://longbridge.com/en/news/226877415.md" description: "The number of local neighborhood retail store tenders reached a record high in 2023, with 20 stores set to launch in 2024, three times the number since 2019. Analysts point out that neighborhood stores remain a robust and attractive investment opportunity due to population growth and interest rate cuts. A report from DBS Group indicates that some institutions have sold off stores due to adjustments in asset management strategies, with Shengsong Supermarket being the most active bidder, securing 44% of the awarded locations" datetime: "2025-02-02T10:46:36.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/226877415.md) - [en](https://longbridge.com/en/news/226877415.md) - [zh-HK](https://longbridge.com/zh-HK/news/226877415.md) generator: "portal-rs" --- # Neighborhood store bidding set a record last year Analysis: Still a stable and attractive investment In 2024, the Housing and Development Board (HDB) launched a total of 20 neighborhood shops for tender, more than three times the number since 2019. In 2019, 2020, and 2022, six neighborhood shops were launched for tender each year, while only one was launched in 2021 and four in 2023. A recent report from DBS Group pointed out that the record number of tenders is partly due to previous operators, such as Giant and HAO mart, abandoning some shops during their business streamlining process. From 2019 to 2024, Sheng Siong was the most active and successful bidder, winning 15 out of 36 awarded locations, accounting for 44% of the total. The second was NTUC FairPrice, which secured eight locations, representing 22%. Other smaller supermarket operators, such as Prime Supermarket, Ace Marketplace, and Ang Mo Supermarket, also adopted similar neighborhood layout strategies. According to a recent report by JLL, areas with a population exceeding 150,000 but with per capita retail space below the island's average have less competition for shopping malls, thus showing better performance prospects. Besides Woodlands and Yishun, Sengkang, Punggol, Pasir Ris, and Bukit Batok are also considered potential areas. Huang Zhiwei believes that local neighborhood retail shops remain a robust and attractive investment choice. With the continuous launch of supporting facilities and residential projects, it is expected to further increase their visitor numbers. Additionally, with approval, flexible neighborhood shops can also develop new units by changing their usage. He said, "Some institutions are selling off shops to redeploy capital into core businesses. Furthermore, advancements in technology have reduced the demand for physical space for some enterprises, prompting a shift towards a 'light asset' model, where holding excessive retail real estate no longer meets operational needs." Huang Zhiwei, Senior Director of Capital Markets at JLL, pointed out in an interview with Lianhe Zaobao that the move by some operators to sell neighborhood shops reflects changes in their asset management strategies rather than a denial of the value of neighborhood retail shops. With the trend of population growth, some neighborhood areas with relatively scarce retail space are expected to see higher foot traffic, occupancy rates, and rents. For example, Woodlands and Yishun have large populations, with populations reaching 220,000 to 260,000, and it is expected that in the next five years, Woodlands will add about 7,000 to 7,500 new Build-To-Order (BTO) units, while Yishun is expected to have about 5,000 to 5,500 new units completed in the same period #### Extended Reading Chen Tianyu, Managing Director of Capital Markets and Investment Sales at ERA, pointed out in an interview that supermarket retailers like Shengsong Supermarket favor neighborhood stores mainly because their core business is to provide daily necessities for families. This business model is particularly suitable for areas with high foot traffic, prominent shop locations, and dense populations. ### Shengsong Supermarket Most Active in Bidding Over the Past Five Years The number of neighborhood retail stores launched for bidding locally last year reached a record high. Analysts believe that some institutions are divesting neighborhood stores mainly due to adjustments in their asset management strategies. Benefiting from factors such as population growth and interest rate cuts, neighborhood retail stores remain a stable and attractive investment opportunity. He also noted, "We have observed that the leasing demand for neighborhood stores remains strong, with rental prices on the rise. Depending on factors such as the remaining lease term and the location of the assets, investors can typically expect to achieve an average net yield of over 3.5%. 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